Finding 1167402 (2022-003)

Material Weakness Repeat Finding
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2025-12-31
Audit: 378469
Auditor: RSM PUERTO RICO

AI Summary

  • Issue: Key personnel failed to validate eligibility of applicants for federal programs, risking engagement with ineligible vendors.
  • Impact: Insufficient staffing led to a lack of formal procedures, increasing the risk of unallowable costs.
  • Recommendation: Assess staffing needs and implement formal procedures to ensure vendor eligibility checks are consistently performed.

Finding Text

Condition: The key personnel in-charge of completing the procedures regarding eligibility of applicants under programs requirements did not perform the procedures to validate that the person with whom it is intended to do business was not debarred, suspended or otherwise excluded from or ineligible for participation in Federal programs or activities. Cause: Lack of sufficient personnel to perform the task. Effect or potential effect: Lack of formal procedures to assure that the vendors/contractors were not suspended or debarred may lead to an unallowable cost. Questioned Costs: None

Corrective Action Plan

Views of responsible officials: Before the approval of budget and the contract petition, the Chief Financial Officer will verify if the vendors are excluded as an authorized Federal contractor. The Company will establish a formal procedure to ensure that all vendors for federal funds are verified against the excluded list at least once a year. This verification process will ensure compliance with federal regulations and avoid engaging with vendors who may be suspended or debarred. Additionally, this procedure will be recommended to be included in the review process for quotes or bidding requirements, further enhancing the Company’s ability to comply with federal regulations and maintain responsible vendor relationships.

Categories

Allowable Costs / Cost Principles Eligibility Procurement, Suspension & Debarment

Other Findings in this Audit

  • 1167400 2022-001
    Material Weakness Repeat
  • 1167401 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $1.99M